Algeria's new Prime Minister Abdel-Aziz Belkhadem has promised constitutional reform and an increase in public workers' salaries after he was appointed on Wednesday night. Belkhadem was quoted in press reports on Thursday saying a "revision" of the Constitution and a long called for increase in pay for public sector workers would be his priorities.

The presidential office announced last night that Belkhadem, 61, a confidant of Algerian President Abdelaziz Bouteflika, would replace Ahmad Ouyehia as prime minister.

Daily newspaper Le Jeune Independant said Thursday that Ouyehia, who resigned on Wednesday night, had been scuppered by his own opposition to an increase in public salaries.

His resignation came after thousands of workers in the industrial area of Rouiba, 20 kilometers east of Algiers, demonstrated Wednesday to demand a raise and Ouyehia's departure.

The former president had become unpopular since he came out against the general salary increase proposed by the unions and supported by the FNL, led by Belkhadem, in January.

Ouyehia's unpopularity was exacerbated by his intransigence in the face of repeated strikes by teachers, vets, doctors and by workers who claimed their jobs were threatened by the privatization of public sector organizations, which the former prime minister was determined to push through.

Ouyehia is secretary general of the National Democratic Rally, one of the parties in the governing coalition, which also includes the dominant National Liberation Front and the Islamist Movement of a Peaceful Society.

Several papers said Belkhadem would face problems if he did not keep his promise.

"The nomination of Abdel-Aziz Belkhadem, who has little experience of economic affairs, could lead to disenchantment," the Al-Watan newspaper said.

Belkhadem, foreign minister from August 2000 to May 2005, had also opposed Ouyehia's plan to make a declaration of general policy to Parliament, as laid down by the Constitution.

Ouyehia and Belkhadem also clashed over plans to revise the Constitution, increasing the number of presidential terms from two to three, with Ouyehia against the scheme.

After resigning, Ouyehia told reporters that he had thanked Bouteflika for the "confidence shown and the total support given during these three years."

He had previously been premier from December 1995 to December 1998 under the presidency of Liamine Zeroual.

In 1992, shortly after the FLN had agreed to allow the first multi-party elections since independence from France in 1962, Algeria plunged into a disastrous civil war. It was sparked by the military-backed government's decision to cancel a elections that an Islamic party, the FIS, had been poised to win.

The decision sparked almost a decade of appalling bloodletting, during which Islamic extremists carried out attacks on both the military and civilians, amid allegations of major human rights abuses on both sides.

An estimated 150,000 people died and even today violence continues, although at a much lower level.

After being elected president in 1999, Bouteflika was widely praised for helping to bring the conflict to an almost complete end.

He notably organized a referendum in September of that year to bring in a "civil reconciliation" plan, under which guerrillas who had not carried out atrocities could benefit from an amnesty.